Title: Tax Incentives: Revisiting the Departments of Money, Treasury, and Internal Revenue Service
In an upcoming tax season, Scott Bessent, President-elect Donald Trump's nominee for Treasury Secretary, announced that the Direct File program will be operational. This program allows eligible taxpayers to file their taxes directly with the IRS online for free, although some Republicans in Congress have expressed dissatisfaction with the program.
The Direct File program will be available in 25 states, including Alabama, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming. This means that 62% of Americans will reside in these states, benefiting from this tax filing option.
Scott Bessent, a South Carolina native and Yale University graduate, will have significant responsibilities if confirmed as the Secretary of the Treasury. He is expected to formulate and recommend domestic and international financial, economic, and tax policies, as well as manage the public debt. The Secretary of the Treasury serves as the government's chief financial officer and carries out various law enforcement responsibilities and sits on multiple councils and boards.
Since IRS Commissioner Werfel announced his last day at the agency to be January 20, 2025, Congressman Billy Long has been nominated to take his place. In the meantime, Deputy IRS Commissioner Douglas O'Donnell will serve as Acting IRS Commissioner.
One of the IRS Commissioner's essential responsibilities is setting Treasury Regulations. Recently, the IRS has proposed regulations to update Circular 230 - the rulebook for certain tax professionals such as attorneys, CPAs, and enrolled agents who can practice before the IRS. The agency has also provided final regulations for so-called "microcaptive transactions," which involve small captive insurance companies that are taxed under section 831(b).
Additionally, the IRS has extended due dates for filing and paying taxes following disasters like hurricanes and wildfires. California, for example, has granted tax filing and payment extensions to those impacted by wildfires, offering various tax relief measures like casualty loss deductions and retirement account tax breaks.
When it comes to charitable deductions, taxpayers must itemize their deductions on Schedule A to take advantage of this tax break. Most taxpayers do not itemize thanks to the Tax Cuts and Jobs Act, which doubled the standard deduction. However, those who do itemize can take advantage of the charitable deduction, with more than 2/3 of those taxpayers who itemized claiming this deduction in 2022.
Reference(s):1. Board of Governors of the Federal Reserve System2. IRS (Direct File Availability Map)3. Forbes (Scott Bessent background)4. Bloomberg (Congressman Billy Long nomination)5. Bloomberg (Updated Circular 230 and contingent fees)6. Reuters (IRS Statements and Regulations)7. CNN (Tax relief following wildfires)8. Tax Policy Center (California wildfires and tax relief)9. IRS (Disaster Assistance and Emergency Preparedness)10. CNN (Tax Tips: Responding to Natural Disasters)11. IRS (Charitable Donations) (Charitable donations and itemizing)12. IRS (Standard Deduction) (Standard deduction amounts for 2025)13. IRS (Tax Adjustments) (Tax adjustments for 2025)14. IRS (TCJA) (TCJA changes and their impact on marginal tax rates)15. Tax Policy Center (2022 Data) (Percentage of taxpayers who itemized in 2022)16. Tax Policy Center (2022 Data) (Percentage of itemizers who claim the charitable deduction in 2022)17. Senior Writer, Tax (Kelly Phillips Erb, Senior Writer, Tax at Our Website)18. Our Website Premium Content (Pages marked with a star require log-in for access)
- During the tax filing season, eligible taxpayers in California, among other states, can take advantage of the Direct File program, announced by Scott Bessent, to file their taxes directly with the IRS online for free.
- As the nominee for Treasury Secretary, Scott Bessent will oversee the implementation of tax legislation such as the Tax Cuts and Jobs Act, which introduced tax cuts and job incentives.
- Kelly Phillips Erb, a senior writer on tax issues, has highlighted the importance of understanding tax breaks, including those provided for those affected by natural disasters like wildfires in California.
- The IRS Commissioner has the power to set Treasury Regulations and propose updates, like the recent modification of Circular 230 regulations, which impact tax professionals such as attorneys and CPAs.
- Following the California wildfires, the IRS provided tax relief measures for affected individuals, including tax filing and payment extensions and casualty loss deductions.
